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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Wednesday, November 29, 2006

Russians build Eurasia's largest ethanol plant, exports to EU, Asia

Quicknote bioenergy investments

Energy super-power Russia has started building one of the world's largest bioethanol factories in the South-Western Siberian region of Omsk. The aim of the €166 million (US$ 218 million) project is the production of green fuel for exports to the EU and Asia.

According to Itar-Tass [*Russian - or German sources: here, here and here], a Russian-Czech consortium is building the ethanol plant which will have an annual capacity of 150,000 tonnes, making it the largest in Eurasia. Leonid Poleschajew, governor of the Omsk region, said the project is financed by a local agrobusiness group called Titan and by Czech company Alta. The factory is planned to be operational in 2008 and will produce up to a fifth of the total national capacity of Europe's main producer, Germany. It is unclear which feedstocks will be used for the production of the gasoline substitute.

Omsk is centrally located in Russia, indicating a strategic choice by the ethanol producers who have explicitly stated that both the EU and East Asia are the targeted markets.

Russia is the world's largest energy exporter with the European Union and East Asia becoming ever more dependent on its oil and gas. But this doesn't prevent the giant from investing in alternative energy sources. Recently, Europe was a bit startled when it learned that Russia's state-owned gas company Gazprom is thinking of buying Germany's Lurgi AG, the world's leading firm in the sector of engineering and building ethanol plants.

According to research by the International Energy Agency's Bioenergy taskforces, the Russian Federation and the Baltic States have a total combined bioenergy production potential of 199 Exajoules per year by 2050, under an optimal scenario. This technical potential is roughly equal to 79 million barrels of oil equivalent per day - slightly less than all the oil consumed in the world today [entry ends here].
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European parliament backs waste prevention and cradle-to-cradle design

Earlier we had a look at bioplastics and how their development must be seen in the broader context of the emerging bioeconomy. Currently, our consumer societies produce enormous amounts of 'bad waste', often based on petroleum products, that either ends up in toxic landfills or is burned and releases carbon. Biopolymers, bioplastics and plant-based products on the contrary would be biodegradable and drive a closed-cycle design philosophy. Products made from plants result in 'good waste': throwing them away comes down to fertilising soils on which new biomass grows. In such a universe, waste is welcome. The more of it, the better (earlier post).

On Tuesday, the European Parliament's Environment Committee implicitly voted in favor of such a future by taking the European Union's policies on waste a step further. The Environment Committee gave its backing to the principle of a "hierarchy of waste" - which ranks waste treatment solutions by their environmental impact - when it voted on Tuesday on the draft revision of the framework directive and the thematic strategy on waste proposed by the Commission. MEPs also called for various clarifications, including a clear distinction between waste and useable by-products.

Five-stage waste hierarchy
The Environment Committee regards the new approach suggested by the Commission, based on the "life-cycle" of a product, as too theoretical. It prefers to stick "as a general rule" to a policy of a "waste hierarchy", which ranks treatments in five categories, from the most to the least environmentally-sound: 1. prevention, 2. re-use, 3. recycling, 4. other recovery operations, 5. disposal. It says Member States should be allowed to depart from this hierarchy "when life-cycle assessments and cost-benefit analyses indicate clearly that an alternative treatment option shows a better record".

MEPs are also calling for total waste production to be stabilised by 2012 (compared to the 2008 position). The Commission is asked to propose indicators by 2008 for assessing progress made by Member States and to formulate by 2010 a "product eco-design policy" as well as targets for waste reduction. Such a product design policy will take on the form of promoting cradle-to-cradle design across the board. Cradle-to-cradle design means a product's components can be entirely re-used either in their original context, or in new products:
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Member States' duties
For the first time, the directive also introduces waste prevention targets for the EU. The aim is that the member states will stabilise their waste production by 2012 to the level produced in 2008.

The Environment Committee wishes to simplify the requirements for national waste management programmes, to make them less bureaucratic and more compatible with the subsidiarity principle. MEPs say the requirement for the Member States to ensure that "all waste undergoes recovery operations" should apply "where practicable". National authorities must also do whatever is needed to ensure that the collection, production and transportation of hazardous waste, as well as its storage and treatment, are carried out in conditions providing optimum protection for the environment, and to ensure that mineral waste oils are collected separately. And all hazardous waste treatment installations must have a permit.

For incinerators and the use of waste as an energy source, MEPs approved the energy efficiency criteria as proposed by the Commission, but asked that operators be given longer to implement them. They also asked that the grant of permits for these operations be subject to a high level of energy efficiency.

Thematic strategy
In addition, in an own-initiative report drafted by Johannes Blokland (IND/DEM, NL), MEPs approved a package of recommendations to the Commission's thematic strategy. These seek to ensure that, in waste policy, the Commission's use of comitology (implementing decisions taken by committees of experts) is restricted to technical and scientific matters, and to underline the importance of the five-stage waste hierarchy. MEPs also call on the Commission to put forward various legislative proposals (on practical measures for waste prevention, new indicators, specific directives on biodegradable waste, construction and demolition waste and sewage sludge, and a revision of the directive on storing waste).

More information:
European Parliament: Environment Committee takes first steps to sort waste directive - 28 November 2006

Euractiv: MEPs back waste-prevention targets, reject burning - 29 Novermber 2006

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Indian sugar firms upbeat on bioenergy and biofuels

Simbhaoli Sugar Mills Ltd., one of India's top sugar firms, announced it is investing 4.23 billion rupees (€72 / $95.6 million) to ramp up ethanol, sugar and biomass electricity output. The company will boost ethanol production to 210,000 tonnes annually by April 2007 from the current 90,000 tonnes, said Sanjay Tapriya, finance director. Another Indian firm, Triveni Engineering and Industries Ltd., for its part announced it expects its power co-generation and ethanol businesses to contribute 15 percent of annual revenues by 2010.

As part of an ambitious bioenergy program (earlier post), India is rolling out a plan to boost the mixing of ethanol with fuels to cut its dependence on crude oil imports, and sugar firms are rushing to take advantage of the new market. But there are other, policy-related reasons why India's sugar companies are investing in ethanol and bioenergy:
  • The Indian government fixes a floor price which sugar companies must to pay to cane farmers, another reason why sugar firms are diversifying into ethanol and power to mitigate risks as domestic sugar prices have not risen as fast as prices paid to farmers for sugarcane.
  • The Indian government recently imposed a ban on sugar exports, but many expect it to be lifted before the end of the year. Global sugar prices have fallen to about $390-$400 a tonnne from $500 in July. Even when the ban is lifted, sugar prices are not expected to rise. Such wavering sugar policies have posed risks for mills, which is why sugar companies are focusing on areas like ethanol production and power co-generation.
Given this context, let's have a quick look at how some of India's largest sugar producers are reacting by diversifying into bioenergy and ethanol production:
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-has four sugarcane crushing mills in Uttar Pradesh, and is the second-largest sugar firm in India, the world's second-largest producer and biggest consumer
-Triveni is setting up its first ethanol distillery with a production capacity of 160,000 litres a day by February 2007
-It is ramping up the capacity of its power co-generation unit to about 67 megawatts of electricity; the feedstock is sugarcane bagasse, a residue
-The company sees triple-digit growth in 2006/2007 profit and sales for its engineering business and a stabilisation of net margins in its sugar business

-owns three sugar units, three distilleries and two power co-generation units in northern Uttar Pradesh
-is investing to raise capacities of sugar mills, distilleries and power co-generation plants and sees distinct opportunities in all three diverse areas for an integrated sugar company
-the company is raising its sugar output to 20,100 tonnes crushed per day (tcd) from 11,000 tcd, while it is ramping up power co-generation capacity to sell about 36 MW of electricity

India is the world's largest consumer of sugar, and its second largest producer, after Brazil. The country is likely to produce 22.7 million tonnes of sugar in the crushing season that began in October against 19 million tonnes in the last season, industry officials have forecast. According to the FAO, the country's sugarcane industry employs some 35 million farmers and their families, concentrated in two main growing areas (click map).

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South African company to make biodiesel from algae

South African biofuels firm De Beers Fuel Ltd (also known as Infiniti Biodiesel) announced it plans to produce 16 to 24 billion litres of biodiesel a year from algae within five years with an initial investment of 3.5 billion rand (€372 million / US$490 million).

The company has bought licenses for 100,000 acres (40,470 hectares) to be developed into algae farms - for which the initial investment is targeted - and within five years from now the intention is to increase that land area to 800,000 acres (323,700 hectares).

De Beers Fuel - which is unrelated to the world's biggest diamond producer De Beers - said in a statement that South Africa uses about 8.1 billion litres of biodiesel yearly. De Beers Fuel already runs a plant which produces 144 000 litres of biodiesel daily from sunflower seed oil, at Naboomspruit in the northern Limpopo province. A biodiesel algae reactor installed at the plant will be showcased to investors, experts and the media later this week.

"The project is highly capital-intensive. The first 100 acres will require about R3.5bn, this has been sourced mainly from foreign private equity groups," Hendy Schoombee, a senior official at De Beers Fuel said. "We had initially intended to list the company to raise the money. We might list at a future date to raise money for further expansion," he added.

High yields, but doubts over costs
According to De Beers, one hectare of algae can yield some 37,000 liters of biodiesel (one acre produces roughly 24,000 gallons). These numbers are derived from studies carried out in the 1980s and 1990s, when several countries researched the feasibility of using algae as a biomass feedstock. One such study, carried by the US National Renewable Energy Laboratory under the discontinued Aquatic Species Program [*.pdf] concluded that large-scale algae production is not feasible given the high costs involved. Maybe with current high oil prices, the economics of the system have changed.

Algae only yield high and continuous amounts of biomass when they are grown in closed photo-bioreactors and under laboratory conditions. These reactors are extremely expensive and not suitable for large-scale applications. This is why the research discarded this option and assessed the production of algae in large open ponds instead. It found that under open pond conditions, algae cultures become unstable and biomass yields drop to levels below those of ordinary energy crops:
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For this reason, there hasn't been any real large-scale production of algae for biofuels so far. Several companies have been experimenting with photo-bioreactors and announced 'breakthroughs' (earlier post) or expansion plans, but after a few years, no progress has been seen from any of these companies (earlier post). It remains to be seen whether De Beers Fuel will be different.

In any case, the company announced that it will use land that is not arable or useful for most other purposes, and will also generate electricity from waste material out of the biodiesel production process.

Its biodiesel will be targeted for industrial use and for future exports, and is based on technology supplied by a US company, GreenFuel Technologies Corporation, while Green Star Products, also of the US, will build the bio-diesel reactors (earlier post).

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